Question

1. The following table contains closing monthly stock prices for Oracle Corporation (ORCL), Microsoft Corporation (MSFT), and NVidia (NVDA) for the first half of 2017.

Ticker	6/30/2017	5/31/2017	4/30/2017	3/31/2017	2/28/2017	1/31/2017
ORCL	50.14	45.39	44.96	44.61	42.59	40.11
MSFT	68.93	69.84	68.46	65.86	63.98	64.65
NVDA	144.56	144.35	104.3	108.93	101.48	109.18

1. Create a formula to calculate the monthly rate of return during the first semester of 2017 and for each company. Format the results as percentages with two decimal places.
2. Calculate the total return for the entire holding period, the compound average monthly rate of return, the average monthly rate of return using the AVERAGE function, and the average monthly rate of return using the GEOMEAN function.

Answer 1

a]

monthly rate of return = (current month price - previous month price) / previous month price

b]

Total return = (ending price - beginning price) / beginning price

Compound average monthly return = (ending price / beginning price)^1/6 - 1 (we do this because ending price = beginning price * (1 + r)⁶, where r is the compound average monthly return, and 6 is the number of months of compounding)

GEOMEAN function will not work for MSFT and NVDA as there are negative returns in some months